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Earlier this year, we wrote about a layoff plan scheduled at Pixar this year, as part of spending cuts within the Disney empire.
The Hollywood Reporter informs us that this layoff plan is now underway. Approximately 14% of the workforce is impacted, approximately 175 people. In this article, we’ll take a look at the reasons behind these layoffs, and at what’s to come for Disney and Pixar.
Disney cuts spending
The positions being cut at Pixar correspond in particular to a refocusing of the studio on theatrical releases. As a reminder, Bob Chapek, who led Disney from 2020 to 2022, heavily invested in streaming services. Covid meant that streaming platforms grew in popularity, and Disney wanted to surf this wave. Which is why Pixar released some animated features directly on Disney+. Pixar also created teams tasked with producing content for the platform. For example, the series Win or Lose set to launch this year.
Now under the leadership of Bob Iger, Disney is seeking to reduce its expenses. It should be noted that the group faced significant turbulence with Covid and its consequences, particularly when it comes to parks and cruises. Hence the layoffs in many branches of the group, including at Pixar.
Streaming finally in the green
Another point to highlight: Disney announced new financial results. The DTC (Direct to Consumer) segment, which includes Disney+ among other things, is now, at long last, profitable. This never happened before.
Sequels and franchises
Let’s also remember that Pixar will release Inside Out 2 this summer. We will of course closely monitor its box office performance. This film is emblematic of the strategy announced by Bob Iger when it comes to animation: a desire to focus on sequels and IPs.
During the financial results announcement, Bob Iger explained this strategy and specified that it applies to all theatrical releases, but especially to animation: both Disney and Pixar are therefore affected. Bob Iger added that for him, sequels made more sense because they are already known and “take less in terms of marketing”. They are easier to promote.
We’re going to balance sequels with originals, particularly in animation. We had gone through a period where our original films in animation, both Disney and Pixar, were dominating. We’re now swinging back a bit to lean on sequels. And so we’ve talked, as you know, about Toy Story and obviously Inside Out this summer. I just think that right now, given the competition in the overall movie marketplace that actually there’s a lot of value in the sequels obviously because they’re known and it takes less in terms of marketing.
Bob Iger
While Disney’s CEO also explains that he wants to “focus more on quality”, (this is echoed by The Hollywood Reporter to explain the layoffs), let’s not deceive ourselves. This strategy is primarily about reducing risks and expenses, to avoid financial failures like Wish or Avalonia: The Strange Journey.
Inside Out 2, Toy Story 5, Moana 2, Zootopia 2 are therefore emblematic of the future of Disney and Pixar studios, at least for now.
